ES Exercise 22-1 Jarlsberg Cheese Company has developed a new cheese slicer call

Question

ES Exercise 22-1 Jarlsberg Cheese Company has developed a new cheese slicer called Slim Slicer. The company plans to sell this slicer through its catalog, which it issues monthly. Given market research, Jarlsberg believes that it can charge $19.00 for the Slim Slicer. Prototypes of the Slim Slicer, however, are costing $24. By using cheaper materials and gaining efficiencies in mass production, Jarlsberg believes it can reduce Slim Slicer's cost substantially. Jarlsberg wishes to earn a return of 29% of the selling price. Compute the target cost for the slim si cer (Round answer to 2 decimal places, e.g. 10.50.) Target cost Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Target Cost = $13.49

Target Cost = Market price of the slim slicer - Desired profit

= $19.00 – [$19.00 x 29%]

= $19.00 - $5.51

= $13.49

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